Client 1st Advisory Group
611 Dru id Ro a d E., S u ite 707
Cle a rwa te r, FL 33756
(727) 450-2301
www.C1a g .c o m
J a n u a ry 1, 2013
This brochure provides information about the qualifications and business practices of
Client 1st Advisory Group. If you have any questions about the contents of this
brochure, please contact us at 727-450-2301 or by email at: info@ c1ag.com. The
information in this brochure has not been approved or verified by the United States
Securities and Exchange Commission (“SEC”), or by any state securities authority.
Additional information about us is also available on the SEC’s website at
www.advisorinfo.sec.gov
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SUMMARY OF MATERIAL CHANGES
This section summarizes material changes that have occurred to our investment
advisory services since the date that our previous brochure was published on January
17, 2012.
•
Effective January 1st of 2013 advisor representatives of Wealth Management
Consultants (“WMC”) located in Hattiesburg, Mississippi, have joined our Firm.
WMC specializes in a variety of investment services that complements our
business model including investment management, fee-based financial planning
and employer-sponsored retirement plan services. We anticipate that a merger of
Client 1st and WMC (n.k.a.“Client 1st Advisory Group—Hattiesburg”) will occur
during 2013 and we will advise you accordingly when the merger is completed.
Effective January 1st 2013 we have changed our name from “Client 1st Advisors,
Inc.” to “Client 1st Advisory Group”.
•
During 2012 we established Team One Advisors as a new Division under Client
First Advisors, Inc. that specialized in creating investment allocation models. As
a result of the above-referenced proposed merger with WMC that offers similar
services, we eliminated Team One Advisors as a separate division.
•
During the last year we made the decision to eliminate our broker-dealer
relationship with Cascade Financial Management, Inc. and our firm’s status as an
Office of Supervisory Jurisdiction (“OSJ”) Branch Office of a registered broker /
dealer.
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TABLE OF CONTENTS
COVER PAGE…………………………………………………………………………………………….1
SUMMARY OF MATERIAL CHANGES………………………………………………………………..2
TABLE OF CONTENTS………………………………………………………………………………….3
ADVISORY BUSINESS………………………………………………………………………………… 4
FEES AND COMPENSATION…………………………………………………………………………..6
PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT…………………………..9
TYPES OF CLIENTS…………………………………………………………………………………….9
METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS……………….10
DISCIPLINARY INFORMATION...…………………………………………………………………….12
OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS..…………………………… 12
CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS
AND PERSONAL TRADING…………………………………………………………………………..13
BROKERAGE PRACTICES………………………………………………………………………… 14
REVIEW OF ACCOUNTS…………………………………………………………………………….. 15
CLIENT REFERRALS AND OTHER COMPENSATION………………………………………….. 16
CUSTODY……………………………………………………………………………………………… 17
INVESTMENT DISCRETION………………………………………………………………………… 17
VOTING CLIENT SECURITIES……………………………………………………………………… 18
FINANCIAL INFORMATION………………………………………………………………………….. 18
BROCHURE SUPPLEMENT (PART 2B OF FORM ADV)……………………………………… .19
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ADVISORY BUSINESS
In this brochure, references to “we”, “us”, “our”, or “our firm” “the Company” and “Client
1st “refers to Client 1st Advisory Group Individuals who serve as our directors, officers,
and representatives are referred to as our “advisors”
“investment advisory
representatives” or “IARs” Our firm’s clients are referred to as “you” “your” or “our
clients”.
Client 1st Advisory Group offers personalized investment advisory services to
individuals, pension and profit sharing plans, trusts, estates, charitable organizations,
and corporations. Services and fee arrangements are described in the following pages.
We are a corporation formed under the laws of the State of Florida. We have been
registered with the United States Securities and Exchange Commission as an
investment adviser since 1997.
Our firm’s Managing Principals are Craig Phillips, Founder and CEO, Michelle Mabry,
President and Dave Stieh, Director of Operations. Vicki Morgan is our firm’s Chief
Compliance Officer.
OUR ADVISORY SERVICES
We provide personalized financial planning and portfolio management services. Most of
our clients are individuals and revocable grantor trusts. However, we also work with
family limited partnerships, pension and profit sharing plans, estates, charitable
organizations and small businesses. We also provide financial consulting services to
Employer sponsored retirement plans.
We provide advice to our clients through our “Consultative Client Management
Program. This process involves a series of meetings to (1) determine your financial
goals and objectives, (2) present you with an investment plan, (3) form a mutual
commitment to the plan and (4) schedule progress meetings on a quarterly basis.
We work with other professionals (e.g. lawyers or accountants) who are directly
engaged by our clients to assist on an as-needed basis.
Inve s tme nt Ma na ge me nt
Client 1st provides customized asset management services by gathering relevant
information about your current financial needs, objectives, existing financial assets,
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investment experience and risk tolerance. All aspects of your financial affairs are
reviewed. We use this information to create a Plan called a Dynamic Investment Policy
Statement (“DIPS”). This Plan (DIPS) forms the basis of the asset allocation model that
we will use to manage your investments. The DIPS is a dynamic process that changes
with adjustments to your goals and objectives and the financial markets that we invest in
on your behalf.
A key element of our regular progress meetings in our Consultative Client Management
Program is to revisit this process on a quarterly basis. The DIPS can also be revisited
on demand when a material change in your financial situation occurs. A Plan review,
even when changes are made, may not result in a change in your asset allocation. But
when a change in asset allocation is determined to be necessary, the resulting Plan
becomes the current and valid DIPS.
When creating or adjusting your asset allocation based on the DIPS, we contract with
third party, unaffiliated asset managers to manage the investment portfolio that
complements your investment profile. These third party asset managers are selected by
our due diligence process that reviews their investment strategies, experience,
performance record, integrity, and regulatory history. We continue to monitor the
performance of these investment managers and change managers if necessary based
on their performance and changes in your profile.
Our Firm’s minimum account size for investment management is $250,000 of assets
under management. Craig Phillips and Michelle Mabry require a $1 million account
minimum to serve as lead advisor for any client or household. Client 1st reserves the
right to waive the account minimum.
Fina ncia l P la nning a nd Cons ulting
.
We offer financial planning services to you on matters involving securities and nonsecurities topics. The areas addressed may include retirement income planning, estate
planning, budgeting and cash flow analysis, business succession planning, education
planning and other areas where you may require assistance. Your IAR may prepare
special reports on these matters at your request.
As is the case with our investment management program, our financial plans are based
on the financial information that you disclose to us at the time the plan is presented to
you. Client 1st does not offer any guarantees or promises that your financial goals and
objectives will be met. Further, you must continue to review any plan and update the
plan based upon changes in your financial situation, goals, or objectives or changes in
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the economy. As your financial situation, goals, objectives, or needs change, you will
need to promptly notify Client 1st and your investment advisory representative so that
we can make adjustments to your plan.
You are under no obligation to act on our financial planning recommendations.
Moreover, if the financial plan that we prepare requires investment management you
are under no obligation to implement the financial plan through Client 1st .
Re tire me nt P la n Cons ulting
Client 1st offers its qualified advisors a fee-for-service consulting program whereby
advisors may offer one-time or ongoing advisory services to qualified retirement plans.
Through the Retirement Plan Consulting program, qualified advisors may assist plan
sponsors with their fiduciary duties and provide individualized advice based upon the
particular needs of the plan and/or plan participants regarding investment management
matters, such as:
•
•
•
•
Investment Policy Statement support
Investment selection and monitoring
Overall portfolio composition
Participant advice programs
ASSETS UNDER MANAGEMENT
We manage your assets on either a discretionary or nondiscretionary basis. As of
December 31, 2012, we had total assets under management of $140,725,548, of which
$128,301,403 in client assets were managed on a discretionary basis and $12,424,145
were managed on a non-discretionary basis.
FEES AND COMPENSATION
INVESTMENT MANAGEMENT FEES
Advis or Fe e s
Our fee is billed quarterly in advance. The fee is based on the market value of the
account on the last business day of the preceding calendar quarter. The quarterly fee is
one fourth (1/4) of the annual fee rate. The market values are also separately provided
to you by the custodian. We urge our clients to compare both statements. If errors are
discovered in the firm’s favor, we credit or refund such amount, with no time limit.
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The first billing cycle begins on the account inception date and is based on the account
value on the inception date as determined by your broker-dealer or other qualified
custodian. We prorate the fee for new accounts based on the number of days
remaining in the calendar quarter. The quarterly billing value is equal to the closing
market value of the account on the last business day of the quarter.
Although our fees for our services may be negotiated under certain circumstances, our
standard fee schedule is as follows:
PORTFOLIO SIZE
ANNUAL % ASSET MGT
250,000
TO
499,999
1.50%
500,000
TO
999,999
1.25%
TO 4,999,999
1.00%
1,000,000
5,000,000
&
Above
Negotiable
Our fees are based on the aggregate value of related accounts, the complexity of the
the account and the investment strategies employed. We will specify the amount and
the manner in which we charge fees in our written agreement with you.
Upon your authorization, the custodian of your assets will deduct the advisory fee from
your account
Outs ide Ma nge r Fe e s
In addition to our advisory fees, you may also incur fees imposed by the outside money
managers and their corresponding custodians that we may choose on your behalf. The
fee for the outside managers and custodians ranges from 0.5% to 1.25% depending on
the investment strategies and size of the account.
Othe r Fe e s a nd Expe ns e s
In addition to management fees, accounts may be subject to transaction fees assessed
by third parties Transaction fees or commissions charged by broker/dealers executing
the transactions and custodians maintaining your assets are separate in addition to the
asset management fees and are non-negotiable. Any transaction fees are billed by the
broker/dealer or custodian.
Moreover, If the manager that we choose is investing in funds, you will also incur
expenses at the fund level. “Investment company shares” or “funds” of which the most
common types are mutual funds, index funds, exchange-traded funds (“ETFs”) and unit
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investment trusts (“UITs”) charge their shareholders various advisory fees and
expenses associated with the establishment and operation of the funds. These fees and
expenses generally include a management fee, shareholder servicing, portfolio
transaction costs, other fund expenses, and sometimes a distribution fee. These
separate fees are disclosed in each fund’s current prospectus, which is available from
the sponsor and, upon request, from us. The expenses at the fund level range from
0.15 % to 0.75%.
FINANCIAL PLANING AND CONSULTING FEES
The Client 1st Financial Planning and Consulting Program provides clients with the
option of paying an annual fee for ongoing services, a flat fee, or an hourly rate not to
exceed $350 per hour. The fee amount a client will pay is negotiable between the
Client and his or her advisor and may either be paid at the time of service, in advance of
service, or in arrears. Annual fees may be paid in monthly, quarterly, semiannual, or
annual installments as agreed to between the client and the advisor.
In some circumstances, implementing the recommendations in financial plans may
involve investment or insurance products that result in a commission or other fee being
paid to a registered representative of a broker / dealer. Client 1st advisors are not
registered representatives of a broker/dealer and do not receive commissions or
12(b)-1 fees. However, some of our advisors are registered insurance agents and may
receive commissions for fixed insurance products. In instances where a client pays a
fee for financial planning advice, the client is notified in advance of any such
transactions resulting in a commission being paid to an associated person of Client 1st.
RETIRMENT PLAN CONSULTING
The Client 1st Retirement Plan Consulting program provides clients with the option of
paying an annual fee for ongoing services based on a percentage of assets under
advisement, a flat fee, or an hourly rate The fee amount a client will pay is negotiable
between the client and the advisor. Fees may be paid directly from qualified plan assets
or may be direct billed, as agreed to between the client and the advisor.
TERMINATION OF AGREEMENTS
You may terminate any Investment Advisory Agreement, Financial Planning Agreement
by notifying Client 1st in writing.
For Investment Management Agreements you may terminate the Agreement for any
reason within five (5) days of the contract date. After 5 days the quarterly advanced fee
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that you paid is non-refundable. Going forward the Agreement may be terminated by
either party upon written notice to the other party and will become effective on the date
received by the other party (“termination date”). You will be obligated to pay fees
through the termination date.
For Financial Plan Consulting Agreements and Retirement Plan Consulting
Agreements, you may terminate the agreement at any time and a refund of unearned
fees will be provided to you. The unearned fee will be calculated by Client 1st and your
advisor and is based on the amount of time the advisor has spent working for you
before you terminated the agreement. A full refund will be made if you terminate your
agreement within 5 business days of signing the agreement.
Client 1st may also terminate the above-referenced agreements by written notification if
pertinent information to the planning process has not been provided. Any unused
portion of advanced fees will be refunded within 15 days.
PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT
We do not charge any performance-based fees (fees based on a share of capital gains
on or capital appreciation of your assets).
TYPES OF CLIENTS
Our investment management and financial planning services are available to
individuals, revocable grantor trusts, pension and profit sharing plans, estates,
charitable organizations and small businesses.
For investment management services our Firm’s minimum account size is $250,000 of
assets under management. Craig Phillips and Michelle Mabry require a $1 million
account minimum to serve as lead advisor for any client or household. We may require
you to add to the amount in order to maintain the minimum or request that the account
be terminated. These conditions are negotiable in light of your specific circumstances
and relationships with our firm and our principals and representatives. Client 1st
reserves the right to waive the account minimum. There is no minimum asset size for
our fee-based financial planning services .
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METHODS OF ANALYSIS, INVESTMENT STRATEGIES
AND RISK OF LOSS
Generally speaking our goal at Client 1st is to help you achieve your stated investment
objectives by selecting a mix of investment products and asset managers that provide
the highest returns at an acceptable level of risk within your stated time frame.
METHODS OF ANALYSIS
We determine the appropriate asset mix and asset allocation through analysis of
potential asset classes for the period of your given time horizon. In the course of
determining the appropriate investment assets and allocations, we also attempt to
incorporate your existing investment assets into the mix.
In performing our analysis we utilize research software created by third parties that
incorporate performance and statistical probability of the existing investment asset
classes. We also utilize other information sources both public and purchased including
financial publications, prospectuses and annual reports.
INVESTMENT STRATEGIES
The portfolio of investment assets based on the allocation strategy may include but not
be limited to various combinations of stocks, bonds, mutual funds, exchange traded
funds (“ETFs”) and to a limited extent “alternative investments” such as Real Estate
Investment Trusts (“REIT’s), limited partnerships, master limited partnerships (“MLP’s),
Commodity Trading Advisors (CTA’s), Fixed Income and Equity Long Short funds,
Absolute Return Funds, etc.
We may select appropriate models and/ or outside money managers that incorporate
your asset allocation and corresponds to your means, goals, objectives an risk
tolerance.
Typically we establish your investment portfolio in a Unified Managed Account (“UMA”).
A UMA is a professionally managed private investment account that is rebalanced
regularly and permits us to open multiple accounts and utilize multiple types of
investments. We track and monitor the performance of your portfolio on a regular basis
to ensure that the performance is on track to meet the financial objectives that we
established. You will also be provided with quarterly reports (either electronically or by
mail) of your portfolio’s performance.
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RISK OF LOSS
We offer advice about a wide variety of investment types, including mutual funds, index
funds, ETFs, and fixed and variable annuities, each having different types and levels of
risk. We will discuss these risks with you in determining the investment objectives that
will guide our investment advice for your account. We will explain and answer any
questions you have about these kinds of investments, which present special
considerations such as the following.
Investing in securities involves risk of loss that you should be prepared to bear.
Obtaining higher rates of return on investments typically entails accepting higher levels
of risk. We work with your to attempt to identify the balance of risks and rewards that is
appropriate and comfortable for you. However, it is still your responsibility to ask
questions if you do not fully understand the risks associated with any investment or
investment strategy.
Also, while we strive to render our best judgment on your behalf, many economic and
market variables beyond our control can affect the performance of your investments and
we cannot assure you that your investments will be profitable or assure you that no
losses will occur in your investment portfolio. Past performance is one relatively
important consideration with respect to any investment or investment advisor, but it is
not a predictor of future performance.
Please be advised that all investment programs have certain risks that are borne by
you, the investor. Our investment approach constantly keeps the risk of loss in mind.
Investors face the following investment risks:
Inte re s t-ra te Ris k: Fluctuations in interest rates may cause investment prices to
fluctuate. For example, when interest rates rise, yields on existing bonds become less
attractive, causing their market values to decline.
Ma rke t Ris k: The price of a security, bond, or mutual fund may drop in reaction to
tangible and intangible events and conditions. This type of risk is caused by external
factors independent of a security’s particular underlying circumstances. For example,
political, economic and social conditions may trigger market events.
Infla tion Ris k: When any type of inflation is present, a dollar today will not buy as much
as a dollar next year, because purchasing power is eroding at the rate of inflation.
Curre ncy Ris k: Overseas investments are subject to fluctuations in the value of the
dollar against the currency of the investment’s originating country. This is also referred
to as exchange rate risk.
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Re inve s tme nt Ris k: This is the risk that future proceeds from investments may have to
be reinvested at a potentially lower rate of return (i.e. interest rate). This primarily
relates to fixed income securities.
Bus ine s s Ris k: These risks are associated with a particular industry or a particular
company within an industry. For example, oil-drilling companies depend on finding oil
and then refining it, a lengthy process, before they can generate a profit. They carry a
higher risk of profitability than an electric company, which generates its income from a
steady stream of customers who buy electricity no matter what the economic
environment is like.
Liquidity Ris k: Liquidity is the ability to readily convert an investment into cash.
Generally, assets are more liquid if many traders are interested in a standardized
product. For example, Treasury Bills are highly liquid, while individual real estate
properties are not.
Fina ncia l Ris k: Excessive borrowing (leverage) to finance a business’ operations
increases the risk of profitability, because the company must meet the terms of its
obligations in good times and bad. During periods of financial stress, the inability to
meet loan obligations may result in bankruptcy and/or a declining market value.
DISCIPLINARY INFORMATION
Registered Investment advisors are required to disclose all matters regarding any legal
or disciplinary events involving our firm or any of our representatives. We have no
items to report.
OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS
We participate in a network of financial service providers who periodically gather to
share professional ideas and experiences. Other participants of this network may refer
prospective clients to our firm for its expertise, and we may refer clients to other network
participants for their expertise. These professional referrals come from, estate planning
attorneys and accountants Unless separately disclosed to you, these are made on an
uncompensated basis. Participants will, however, benefit from future cross-referrals.
If compensation will be paid for the referral, then you will receive a specific disclosure
brochure about the nature of the referral, the referral relationship, and the referral
compensation (See below “Client Referrals and Other Compensation”). Compensation
or future benefits that we or other network participants receive from referrals creates
conflicts of interests and you should carefully consider in proceeding with such referrals.
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You are never obligated to accept a referral and will not be charged any additional fee
for it.
Some of our IARs are registered insurance agents and occasionally may receive
commissions on fixed insurance products. You will be notified in advance of any such
transactions resulting in a commission being paid to an associated person of Client 1st.
(See above” Financial Planning and Consulting Fees “ and below “Client Referrals and
Other Compensation” The additional compensation creates conflicts of interest that you
should consider before engaging our services.
CODE OF ETHICS, PARTICIPATION OR INTERIEST IN CLIENT
TRANSACTIONS AND PERSONAL TRADING
CODE OF ETHICS
We have adopted a Code of Ethics (the “Code”) describing the standards of business
conduct we expect all officers, directors, employees, and advisory representatives to
follow. It expresses our core fundamental values to be honest, fair, and forthright in our
dealings with clients and others in the conduct of our business.
Our Code also guides our practices in giving investment advice to our clients and
personal trading of securities for our employees and their related accounts. The Code
also describes certain reporting requirements with which particular individuals,
associated with or employed by us, must comply. You may request a copy of our Code
by contacting our Chief Compliance Officer, Vicki Morgan at (727) 450-2301.
PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS
Client 1st employees and representatives may benefit from their purchases or sales of
investments that we recommend to you and we may buy or sell securities that are also
held by our clients. However, employees may not trade their own securities ahead of
our clients’ trades.
PERSONAL TRADING
Our Chief Compliance Officer reviews all employee trades each quarter. The personal
trading reviews ensure that personal trading by our employees does not affect the
market and If any irregularities are noted, the firm’s President is advised.
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BROKERAGE PRACTICES
SELECTING BROKERAGE AND CUSTODIAL SERVICES
Client 1st selects brokerage service relationships that include custody of securities,
trade execution, clearance and settlement of transactions. The factors that we
considered in selecting our brokerage and custodial services include:
·
·
·
·
·
·
·
·
Range of securities offered: stocks, bonds, mutual funds, ETFs, Alternative
Investments
Low transaction costs
Access to client data
Monthly/ quarterly reports to clients
Capability of supporting 3rd party money managers
In-house research capabilities
Overlay functions for customizing asset allocations
Back-office support facilitating management of multiple Client accounts
We have established primary custodial and brokerage service relationships with two
independent SEC-registered broker/dealers, T.D. Am e ritra d e , In c . and P e rs h in g LLC.
T.D Ameritrade and Pershing are unaffiliated with each other and are not affiliated with
Client 1st. We receive some benefits from these relationships that are outlined below
under “Client Referrals and Other Compensation”.
SELECTING MONEY MANAGERS AND MODELS
We choose money managers and portfolio models (controlled by money
managers) that correspond with the asset allocations that we develop for you based on
your means, goals, objectives and risk tolerance.. A model is an asset allocation
template on the UMA platform that provides a basis for portfolio construction and
maintenance. The criteria that we use for selecting our models and mangers includes
but is not limited to reviewing following factors:
·
·
·
·
·
Performance— 1, 3 and 5 year performance and historical quarterly returns.
Volatility— the asset mix and returns on a risk basis.
Expenses— costs and fees being charged for the asset types.
Credentials—the training, education and experience of the mangers
Regulatory History—and disciplinary events with the SEC, SROs or States.
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BEST EXECUTION AND TRADING FEES
Client 1st relies on reviews on execution of trades at each custodian each quarter by
the broker-dealers. We do not receive any portion of the trading fees charged by the
broker-dealers.
AGGREGATION OF ORDERS
We do not aggregate client orders. Our third party money managers aggregate orders.
SOFT DOLLAR ARRANGEMENTS
We do not participate in any “soft dollar” arrangements where client commissions are
partially rebated in the form of research credits or other benefits. Nor does any
brokerage firm or custodian refer clients to our firm; neither as a matter of course nor in
consideration for using their brokerage services.
REVIEW OF ACCOUNTS
If we provide you with asset management services, we conduct review meetings, with
you at your request, at the time of significant new deposits or withdrawals, during
substantial changes in market conditions, and at least on an annual basis.
You must contact us when a significant change in your financial condition occurs, so
that we can review your portfolio along with your new information to insure the
investment strategies continue to be appropriate. Other conditions that may trigger a
review are volatile market conditions and changes in the tax laws.
We review your accounts on a quarterly basis. Account reviewers are members of our
Investment Committee. They consider your current security positions, models and
money manager and the likelihood that the performance of each security, investment
model or money manager will contribute or continue to contribute to your investment
objectives.
In some cases we prepare portfolio reports. It depends on the size of the client’s
account and whether or not the money manager, broker/ dealer or custodians that are
involved in the relationship regularly produce reports. In most cases written reports are
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produced by our custodians and 3rd party money managers and are provided directly to
our clients or distributed by our IARs. In addition, our clients receive statements from
executing broker/dealers and custodians, as appropriate.
CLIENT REFERRALS AND OTHER COMPENSATION
Client 1st has been fortunate to receive many client referrals. The referrals come from
current clients, attorneys, accountants, employees, personal friends of employees and
other similar sources.
Occasionally we enter into solicitor agreements with accounting firms other professional
firms or individuals who have referred friends and associates or to our Firm. Under
these agreements the solicitor is compensated for their referral by sharing the annual
management fee earned by Client 1st. If you become our client as a result of the
solicitor’s efforts, you will receive a separate solicitor’s disclosure brochure describing
our solicitation arrangements, the compensation we pay to the solicitor, and the terms of
that relationship. You will also receive a copy of this brochure. Generally, any such
agreement will provide for payment to the solicitor as a percentage of the advisory fees
we collect from you. We do not charge clients introduced by such solicitors a higher
advisory fee as a result of our obligation to pay for the solicitation services.
Our President, Michelle Mabry, has entered into a joint venture with the accounting firm
of Donnell & Hicks P.A. to provide accounting and business consulting services. Under
this arrangement Ms Mabry receives fee compensation from the accounting firm for
client referrals.
As disclosed above under “Brokerage Practices”, we utilize TD Ameritrade, Inc and
Pershing LLC as our primary brokerage and custodial service providers. Although, there
is no direct link between our use of these service providers and the investment advice
that we provide to you, we do receive economic benefits for using these providers that
are not available to retail investors. These benefits include the following products and
services (provided without cost or at a discount) : receipt of duplicate Client statements
and confirms; research related products and tools; consulting services; access to a
trading desks that serve advisors exclusively; access to block trading that allows us to
aggregate securities for more cost-efficient and timely execution and then allocate the
appropriate shares to our Clients’ accounts; the ability to have our fees deducted
directly from our Clients’ accounts; access to an electronic communications network for
Client order entry and account information; access to mutual funds with no transaction
fees; access to institutional money managers; and compliance, marketing, technology,
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and practice management products or services provided to our Firm by third party
vendors without cost or at a discount. As part of our fiduciary duty we endeavor at all
times to put the interests of our Clients first and foremost. Clients should be aware,
however, that these benefits in and of themselves create a potential conflict of interest
and may unduly influence our choice of T.D. Ameritrade and Pershing LLC for custody
and brokerage services.
Some of our IARs are registered insurance agents and may occasionally receive
commissions on fixed insurance products that is in addition to our investment
management and financial planning fees.
CUSTODY
Assets are held at qualified custodians. The custodians provide account statements
directly to you at your address of record at least quarterly. Client 1st does not take
custody of Clients’ securities. (See a “Brokerage Practices” above).
In very limited circumstances we act as a trustee for clients. As a trustee, we are
deemed to have custody under SEC Rules. To maintain this relationship we undergo
an annual audit by an Accountant designated by the Public Company Accounting
Oversight Board (PCAOB).
We urge you to compare the account statements received directly from your custodians
to the performance report statements provided to you by Client 1st .
INVESTMENT DISCRETION
You designate Client 1st as your agent and attorney-in-fact to determine appropriate
Account investments based on your financial circumstances and investment objectives.
Our advisor can accordingly select and remove money managers, unified managed
accounts (UMAs) mutual funds, managed future funds and exchange traded funds
(ETFs). The trading discretion granted to Client 1st does not authorize Advisor to
withdraw funds or assets from the Account.
Discretionary trading authority facilitates placing trades in your accounts on your behalf
so that we may promptly implement the investment plan that you have approved in
writing and allows us to periodically rebalance your accounts to maintain the asset
allocation strategy for meeting your goals and objectives.
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VOTING CLIENT SECURITIES
As a matter of firm policy and practice, we will not be responsible for responding to
proxies that are solicited with respect to annual or special meetings of shareholders of
securities held in your account. Proxy solicitation materials will be forwarded to you for
response and voting.
Similarly, we will not be responsible for responding to class action litigation for securities
held in your held in your portfolio. Class action litigation materials that we may receive
on your behalf will be forwarded to you for response.
FINANCIAL INFORMATION
As a registered investment adviser, we are required to provide you with certain financial
information or disclosures about our financial condition or if we have financial
commitments that impair our ability to meet contractual and fiduciary commitments to
you. We have not been the subject of a bankruptcy proceeding and do not have any
financial commitments that would impair our ability to meet any contractual or fiduciary
commitments to you.
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BROCHURE SUPPLEMENT (PART 2B OF FORM ADV)
The following brochure supplement provides information about Cra ig P h illip s , Mic h e lle Ma b ry, Da ve
S tie h , Vic ki Mo rg a n , J u lie Ta lb o t and He rb e rt P o n tze r and is part of the Client 1st brochure. Please
contact Vicki Morgan at 727-450-2301 if you have any questions about the contents of this supplement:
CRAIG P HILLIP S
EDUCATIONAL BACKGROUND AND BUS INES S EXP ERIENCE
Craig Phillips was born in March 1950. After high school, he earned a Bachelor’s Degree from Florida
State University in 1973. Mr.Phillips was employed as a consultant to Fortune 500 businesses from 1973
to 1990. He was employed as an associate of ProVise Management Group, a registered investment
advisor from 1990 to 2001. Craig is the founder Managing Partner and current CEO of Client 1st
Advisory Group Mr. Phillips has also been a registered principal of two independent broker/dealer firms,
Intersecurities Inc.from 1996 until 2006 and Cascade Financial Management, Inc. from 2006 until 2012.
®
Mr. Phillips is a Certified Financial Planner (CFP ). To obtain this designation, Mr Phillips completed the
financial planning education requirements in nine major planning areas set by the CFP Board and
successfully completed the Candidate Fitness Standards and background check. To maintain this
designation Mr. Phillips completes 30 hours of continuing education every two years. Prerequisites for
the CFP designation include a Bachelor’s degree from an accredited college or university and three years
of qualified work experience.
®
®
Mr. Phillips is an Accredited Investment Fiduciary (AIF ) To obtain the AIF designation, had to complete
either a self-study module or a combination of a classroom and self-study module then had to pass a
closed-book, proctored examination to complete the course of study. To maintain the designation, your
advisor completes six hours of continuing education every year.
Mr. Phillips is a registered insurance agent with the state of Florida. In addition to passing the insurance
licensing examination, Mr. Phillips is required to complete 24 hours of continuing education every two
years.
DIS CIP LINARY INFORMATION---None
OTHER BUS INES S ACTIVITIES
In addition to his responsibilities as Managing Partner and CEO of Client 1st, Mr. Phillips is a former
member of the Board of Directors of the Tampa Bay affiliate of the Financial Planning Association (FPA)
and is a current Trustee and former Chairman of the Board of Directors for Directions for Mental Health,
Inc. He is past Treasurer and Acting Chair and current Vice Chair of the Early Learning Coalition of
Pinellas County. He is former Chairman of the Humane Society of Pinellas’ Foundation Board and is a
current member of the Board of Directors of the Clearwater Free Clinic.
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ADDITIONAL COMP ENS ATION
As a licensed insurance agent Mr. Phillips may receive commissions or trail fees based on the sales of
fixed insurance products.
S UP ERVIS ION
Mr. Phillips is the Firm’s Chief Executive Officer and a Managing Principal and is responsible for our
Firm’s overall supervisory program. Mr. Phillips relies on his knowledge, experience and adheres to the
Firm’s Code of Ethics in conducting the Firm’s business and in providing services to his clients.
MICHELLE MABRY
EDUCATIONAL BACKGROUND AND BUS INES S EXP ERIENCE
Michelle Mabry was born in 1967. In 1988, she earned a Bachelor of Science degree from Louisiana
State University with a double major in Economics and International Trade and Finance. Ms. Mabry
began her career at IDS Financial (which later became American Express Financial Advisors). She was a
Senior Financial Advisor and had an independent branch office with Ameriprise Financial when they spun
off from American Express (1989-2008). In 2008, Ms. Mabry formed Wealth Management Consultants,
which merged into Client First Advisory Group, Inc. in 2013. She is a Registered Investment Advisor and
President at Client 1st.
®
®
Ms. Mabry is an Accredited Investment Fiduciary (AIF ). To obtain the AIF designation, your advisor had
to complete either a self-study module or a combination of a classroom and self-study module then had to
pass a closed-book, proctored examination to complete the course of study. To maintain the designation,
your advisor completes six hours of continuing education every year.
®
Ms. Mabry is a Certified Financial Planner (CFP ).To obtain this designation, Ms. Mabry completed the
financial planning education requirements in six major planning areas set by the CFP Board and
successfully completed the Candidate Fitness Standards and background check. To maintain this
designation Ms. Mabry completes 30 hours of continuing education every two years. Prerequisites for the
CFP designation include a Bachelor’s degree from an accredited college or university and three years of
qualified work experience.
Ms. Mabry is a registered insurance agent with the state of Mississippi. In addition to passing the
insurance licensing examination, Ms. Mabry is required to complete 12 hours of continuing education
every two years.
DIS CIP LINARY INFORMATION
Michelle Mabry does not have any material disciplinary history
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OTHER BUS INES S ACTIVITIES
Ms Mabry is involved in the following additional activities that are investment related
Mabry Donnell & Hicks LLC –CEO/Owner of LLC which performs accounting and business consulting
services.
Fixed Life Insurance Sales
Wealth Management Consultants Corporation—Sole owner
Pinebelt Community Foundation –Board member, Investment Committee
TM Associates, LLC—Managing Member Real Estate Holding Company
ADDITIONAL COMP ENS ATION
As a licensed insurance agent Ms. Mabry may receive commissions or trail fees based on the sales of
fixed insurance products.
S UP ERVIS ION
Ms. Mabry is supervised by Craig Phillips, CEO and a Managing Principal of Client 1st . Mr. Phillips may
be reached at 727-450-2301 ext 108 or [email protected].
Mr. Phillips or his qualified designee supervises the activities of Ms Mabry’s work through a number of
supervisory activities that may include but not be limited to the following:
•
•
•
•
Review of new account applications, client profiles and investment strategies
Review of personal account transactions
Periodic audits of the office location.
Through our client relationship management system.
DAVE S TIEH
EDUCATIONAL BACKGROUND AND BUS INES S EXP ERIENCE
David Stieh was born in February 1974. After high school, he earned a Bachelor’s Degree in Finance
from the University of Central Florida in 1988. Mr.Stieh was employed with Western Reserve Life from
1999 until 2006. During that period Mr. Stieh became a registered representative with InterSecurities,
Inc., a subsidiary of Western Reserve Life (n.k.a TransAmerica Advisors, Inc.,). and was also employed
as a Tax Counselor with H&R Block. In 2006, Dave joined Client 1st Advisors, Inc. as the Operations
Manager and as an Investment Advisor Representative. Mr Stieh is currently Chief Operations Officer
(COO) and a part owner of Client 1st Advisors, Inc.
21
Mr. Stieh is a registered insurance agent with the state of Florida. In addition to passing the insurance
licensing examination, Mr. Phillips is required to complete 24 hours of continuing education every two
years.
DIS CIP LINARY INFORMATION---None
OTHER BUS INES S ACTIVITIES
In addition to his responsibilities as COO and as an IAR of Client 1st and Client 1st Advisors, Mr. Stieh is
the Treasurer of the Dunedin, FL North Rotary Club and is active on the Rotary Foundation Committee.
Dave is also a Paul Harris Fellow.
ADDITIONAL COMP ENS ATION
As a licensed insurance agent Mr. Stieh may receive commissions or trail fees based on the sales of
fixed insurance products.
S UP ERVIS ION
Mr. Stieh is supervised by Craig Phillips, CEO and a Managing Principal of Client 1st . Mr. Phillips may
be reached at 727-450-2301 ext 108 or [email protected].
Mr. Phillips supervises the activities of Mr Stieh through a number of supervisory activities that may
include but not be limited to the following:
•
•
•
•
Review of new account applications, client profiles and investment strategies
Frequent office and remote interactions
Review of personal account transactions
Through our client relationship management system.
VICKI MORGAN
EDUCATIONAL BACKGROUND AND BUS INES S EXP ERIENCE
Vicki Morgan was born in October 1948. After high school, she attended St.Petersburg Junior College
from 1966 through 1967 and Hillsborough Community College from 1972 through 1973 . Ms. Morgan
was employed with Stewart Title, Inc. from 1968 until 1975 and Phillips Engineering Company, Inc from
1981 until 1986. Since 1995, Vicki has been Chief Compliance Officer (CCO) of Client 1st Advisors, Inc.
DIS CIP LINARY INFORMATION---None
OTHER BUS INES S ACTIVITIES
In addition to her responsibilities as CCO of Client 1st and Client 1st Advisory Group, Ms Morgan has
been active in a other outside activities. She was a member of the Board of Directors and President of
the Suncoast Tarpon Roundup, Inc. Vicki was a member of the Greater Belleair Younger Women’s
22
Society. She is a member of the Belleair Rotary Club serving on the Board from 2009 until 2012. She
was Rotarian of the Year in 2009 and 2011 and was club President for the 2010 to 2011.
DIS CIP LINARY INFORMATION---None
ADDITIONAL COMP ENS ATION –None
S UP ERVIS ION
Ms. Morgan is supervised by Craig Phillips, CEO, and a Managing Principal of Client 1st . Mr. Phillips
may be reached at 727-450-2301 ext 108 or [email protected]..
Mr. Phillips supervises the activities of Ms.Morgan’s work through a number of supervisory activities that
may include but not be limited to the following:
•
•
•
Through frequent office and remote interactions
Through our client relationship management system.
Review of personal account transactions
J ULIE TALBOT
EDUCATIONAL BACKGROUND AND BUS INES S EXP ERIENCE
Julie Talbot was born in 1964. In 1986, she earned a Bachelor of Science degree from the University of
Southern Mississippi in Finance, with an emphasis in Accounting. Ms. Talbot began her career in
banking as a lender with Trustmark National Bank, in Jackson, Mississippi. When Trustmark launched
their full service broker-dealer subsidiary, TFSI, Ms. Talbot was a Registered Representative with this
new entity.
In 1996, Ms. Talbot joined Raymond James Financial as an Advisor. It was in this capacity that she was
able to establish a third party brokerage arrangement with a community bank, Lamar Bank. Ms. Talbot
also served as Secretary/Treasurer and as Administrator in a family medical practice.
In 2012, Ms. Talbot joined Wealth Management Consultants, Inc. as a Retirement Plan Consultant and
Financial Advisor.
DIS CIP LINARY INFORMATION--None
OTHER BUS INES S ACTIVITIES
Ms. Talbot is involved in the following additional activities: Treasurer-Oak Grove Middle School PTO;
Lamar County Education Foundation-Board Member; University of Southern Mississippi Partner for the
Arts-Board Member.
S UP ERVIS ION
Ms. Talbot is supervised by Michelle Mabry, President and a Managing Principal of Client 1st. Ms. Mabry
may be reached at 601-264-0946 or [email protected]
23
.
Ms Mabry supervises the activities of Ms. Talbot’s work through a number of supervisory activities that
may include but not be limited to the following:
•
•
•
Through frequent office and remote interactions
Review of personal account transactions
Through our client relationship management system.
HERBERT P ONTZER
EDUCATIONAL BACKGROUND AND BUS INES S EXP ERIENCE
Herbert Pontzer was born in 1952. After high school, he earned a Bachelor’s Degree in Government
from Georgetown University in 1974 and an MBA in Finance from The American University in 1978. Herb
was employed with the NASD (n.k.a. FINRA ) from 1982 until 1997. He was Vice President and Chief
Compliance Officer for InterSecurities, Inc., a subsidiary of Western Reserve Life (n.k.a TransAmerica
Advisors, Inc.) from 1997 until 2003 and Senior Vice President and Chief Compliance Officer for NFP
Securities, Inc. from 2003 until 2005. Herb has been an IAR of Client 1st Advisors, Inc. since 2005.
Mr. Pontzer has passed six securities license examinations: Series 7, 24, 27, 53, 63 65 and 99 and is
currently a registered representative with Ceros Financial Services, Inc.(“Ceros”) a registered brokerdealer for the purpose of providing supervision and consulting services. To maintain these registrations
Mr. Pontzer completes FINRA continuing education courses every three years and continuing education
courses each year for Ceros.
®
Mr. Pontzer is a Certified Financial Planner (CFP ). To obtain this designation, Mr Pontzer completed
the financial planning education requirements in nine major planning areas set by the CFP Board and
successfully completed the Candidate Fitness Standards and background check. To maintain this
designation Ms Mabry completes 30 hours of continuing education every two years. Prerequisites for the
CFP designation include a Bachelor’s degree from an accredited college or university and three years of
qualified work experience
Mr. Pontzer is a registered insurance agent with the state of Florida. In addition to passing the insurance
licensing examination, Mr. Pontzer is required to complete 24 hours of continuing education every two
years.
DIS CIP LINARY INFORMATION---None
OTHER BUS INES S ACTIVITIES
Mr Pontzer is a Sales Supervisor for Ceros Financial Services, Inc., a registered broker-dealer. Herb is a
member of the National Society of Compliance Professionals (NSCP) and the Association of Certified
Anti-Money Laundering Specialists (ACAMS).
ADDITIONAL COMP ENS ATION
Mr. Pontzer receives a salary as President and owner of BD Advisor Consultants, Inc., a company that
provides consulting services to financial institutions.
S UP ERVIS ION
24
Mr. Pontzer is supervised by Craig Phillips, President Owner and a Managing Principal of Client 1st
Advisors, Inc. and Client 1st. Mr. Phillips may be reached at 727-450-2301 ext 108 or [email protected].
Mr. Phillips or his qualified designee supervises the activities of Mr. Pontzer’s work through a number of
supervisory activities that may include but not be limited to the following:
•
•
Through frequent office and remote interactions
Review of personal account transactions
25